Your Check Is No Longer in the Mail

by Dan Burger

"The road to using electronic payments is a migratory path," says Murray. "A company is not going to go entirely to e-payments from the start."

Many companies have embraced electronic payment when it comes to payday. Statistics show 56 percent of the U.S. workforce is paid by direct deposit. The next step for those companies is to do electronic remittance--delivering employees their pay stub information via e-mail, most likely as a PDF attachment.

The economics, Murray says, make great sense. For example, take one manufacturer with 1,000 employees who are paid weekly. Every Friday, the comptroller's office in that company probably looks like a nightmare. You'll find people bursting and collating forms, and an electronic payment process could eliminate all that, he says. The savings come from fewer people being involved and less money being tied up in printed forms--in this case, checks and remittance documents.

Murray says electronic payment can become a compelling story when a company explains it to its vendors. "I would go to my suppliers and say, 'How would you like to get paid instantly, as opposed to [every] three or four weeks?'" Murray says. "'As soon as your invoice clears my system, an ACH [automated clearinghouse] payment is made to your account. That's money in your hands.' And even though my theoretical company is taking the money out of its account earlier, it still saves money, because no employee is involved in the process. A supplier can send an invoice and receive money tomorrow. That's not a hard sell."

When it comes to electronic payments and its related field of electronic document management of bill presentment, the Microsoft Windows NT market is ahead of the iSeries segment.

E-payment has been around since the mid 1990s and evolved through DOS-based solutions, early versions of Windows, and now Windows NT. Companies using an NT platform are ahead in the use of XML technology and ACH standards. The automated clearinghouses are the businesses that oversee transactions between businesses and the banking industry.

According to Murray's research, half of the Fortune 5000 is using some degree of e-payment solution. Most of the e-payment solutions were either migrated from mainframes or purchased to run on NT, he says. Those that have had solutions for several years are also finding that technological advancements have made it as economical to buy a new solution today as to stick with the old, and update.

The penetration of e-payment software into the midrange market--Murray calls it a "gut feeling" rather than a research statistic--is less than 5 percent. "The 5 percent are the early users. They have been buying this solution for years in various forms. That's how the marriage between NT and iSeries came about--there needed to be a way to print on the iSeries and create the form on the NT."

One of the companies with electronic document management solutions, including e-payments, that run on both NT and the iSeries, is ACOM Solutions. ACOM's EZPayManager for iSeries has just been announced.

According to Gregg Church, vice president of marketing, communications, and product management at ACOM, EZPayManager for iSeries incorporates features for autoprocessing, check-form design, data handling, and increased security. For electronic payments, remittance advice, and archiving, data files are routed to an NT platform for execution.

Church says that, compared with the conventional printed check processes, MICR laser check processing saves 75 percent or more on per-check costs. Companies that have adopted direct deposit for payroll, accounts payable, and other payment functions are able to reduce their per-payment costs to less than 10 cents, he says.

EZPayManager works by formatting payment data from the enterprise software on stored electronic check forms and spooling the completed check and advice files to MICR-enhanced laser printers, situated either on the iSeries network or to any designated MICR laser printer on the corporate TCP/IP network. In the same payment run, it formats data for electronic payments to ACH network specifications and transfers it to the NT server, where a file is created and forwarded to the banking network for processing. Additionally, eRemittance notification files are transferred to an NT server, which transmits the "pay stub" information to payees via fax or e-mail.

The user interface employs a PC-like graphical toolbar with intuitive button symbols and on-call textual explanations of button functions. Security features include password modification at the administrator level, auto logout, enforced password change, lockout after three failed log-in attempts, and configurable limits on ACH payments.

Other features and options include a check-fraud intervention module, which creates a positive pay file to each bank's specific format requirements; an autoprocessing module that enables users to schedule untended payment runs that generate checks, ACH electronic payments, and their choice of remittance options; and a data-load utility module that allows data to be mapped directly into the EZPayManager database from a user application, such as an ERP or accounting package. The utility allows users to avoid customization charges by mapping their own changes.

The solution is compatible with enterprise software from SSA Global Technologies, Geac, HTE, Infinium, J.D. Edwards, Lawson, MAPICS, Optimum Solutions, and others. The total solution includes Xerox Network Series laser printers that have been MICR-enhanced for top performance by ACOM, as well as stuffing and mailing equipment.

EZPayManager was has been available to NT users for the past year, and ACOM says two out of three new orders for electronic document management solutions include the electronic payment module. Approximately 10 percent of ACOM customers who are upgrading to a newer version of the product are including e-payment capabilities in their orders.

Church says expectations are that the iSeries shops will follow these trends in terms of e-payment implementations.

EZPayManager for iSeries pricing begins at $5,000 for the iSeries and AS/400 checks solution and $10,000 for the companion NT solution.